LAHORE: Auto market experts have urged economic managers to analyse the reason as to why the rates of tractors are almost stable while prices of motorcycles have in declined but the car rates continue to climb up.

They pointed out that tractors manufactured in Pakistan are cheaper than that of other competitive economies like China and India because over 90 per cent of tractor components are produced in the country including the critical parts like engines. This is the reason that despite zero import duty tractors are not imported in the country.

The production of tractors in the country is constantly rising since last five year. The growth continued even during the most acute economic depression in 2008-09. In the same way more than 90 per cent of the motorcycle components are produced in the country.

A few years back the leading brands of motorcycles were selling for Rs80,000 to Rs86,000. Now the rates of the prime Japanese brands range from Rs65,000 to Rs73,000 while Chinese and Pakistani brands cost Rs40,000 to Rs50,000. The import duty on motorcycles is low at 25 per cent but the imports are negligible.

The motorcycle production ranged from 100,000 units to 127,000 units a year during the 1990 decade. The production has increased manifold in the present decade to of 750,000 units a year. The car prices in Pakistan have been constantly increasing during the past 10 years.

Even the increase in car production from 33,000 units at the start of the century to its peak of around 200,000 units a year in 2006-07 failed to make a dent in the car rates. Experts attribute this to low deletion level in the locally assembled cars, price transfer in the imported component and failure of the government to impose its announced policy increasing the duty on imported components from 35 per cent to 50 per cent to discourage use of imported parts.

The News found that Suzuki Mehran is the highest localised passenger car in the country. Seventy per cent of its components are produced by Pakistani vendors while 30 per cent are imported. It was also found that the cost of local components used in Mehran is around Rs115,000 per unit while the imported components that are only 30 per cent of the total cost Rs150,000.

Experts say one reason for higher cost of imported parts is that these are high precision components and another reason is price transfer as these parts reach the local assemblers through Japanese marketing companies. They allege that the flawed government policies are also fuelling high car rates.

They said the import duty on completely knocked down kit of car components not manufactured in Pakistan is still 35 per cent although the government was committed to increase it to 50 per cent last year to promote localization of auto-parts. They said next fiscal year as well as the car assemblers would be able to use the threat of adverse impact on foreign investment to keep the import duty on CKD at 35 per cent.

The News found that that baring one 800cc model, the deletion level is 30-50 per cent in all other cars and the cost of imported component is 75-85 per cent of the total production cost of the car. Experts say that currently the local market is dominated by Japanese brands that keep their local retail rates slightly lower than the cost of high duty paid imported vehicles. This they added discourages imports of dozens of quality brands from other countries.

Experts advised the government to lower the import duty on cars by 5 per cent per year till a level of 35 per cent import duty is achieved. They said this will break the monopoly of existing brands that would then be forced to go for localization of high tech parts for which expertise in Pakistan exists.

They said lowered car prices would boost sales as was proved in case of revival plan for Mehran a few years back when 10 per cent decrease in rates boosted its production from 400 units per month to 2,000 units per month.

ISLAMABAD: The Heavy Mechanical Complex (HMC), Taxila has designed and is fabricating a Chemical Recovery Boiler (CRB) at a paper pulp mill.

This is the first-ever CRB being designed by a local company and shall also be the first boiler to be installed by a paper pulp mill in the country, which is another milestone it has achieved, according to documents received by the Ministry of Industries and Production regarding achievements of HMC during 2009. The CRB uses black liquor waste from pulp plant as fuel for generating steam for power generation and process use and also recovers useful chemicals for re-use in the pulp mill process. staff report

KARACHI: The first phase of Tuwairqi Steel Mills Limited (TSML) will be completed by July 2010, director projects of the mill, Zaigham Adil Rizvi said Monday.

“The first phase has been completed 80 percent and cold commissioning of its distributed control system (DCS) have also been done last month, while the hot commissioning will be done in July”, he said. He said the first phase of the project was to be completed by March this year, but it was delayed due to financial meltdown and bad law and order situation in the country as foreign investment was also stopped.

“In the first phase of the project 100 percent equity has been put by TSML, however in second phase we need to have foreign investment equal to investment of first phase,” Zaigham said.

Because of financial crunch across the world some of the banks included in (9 banks consortium) backed out from financing and financing remained shot around 40 percent, he said.

He said there was a misconception about the completion of first phase in December 2009, as this was mechanical completion of the project that included physical construction, piping, electrical work and cold commissioning (equipment testing) and this has been achieved.

Regarding the production of Direct Reduced Iron (DRI) worldwide, he said about 62 million tonnes of DRI in the form of pellet, lump and HBI was produced in 2009. The 2009 trends show that DRI usage is gaining popularity despite reduced world steel production and consumption.

He said there was a consistent growth in the production of DRI over the years owing to environment-friendly production process and consistent quality of the product. The plant, currently stand with 80 percent completion, spreads over an area of 220 acres at Bin Qasim Karachi and employs the world’s most advanced D I technology of the MIDREX process owned by Kobe Steel of Japan. The first phase of the DRI project would produce 1.28 million tonnes of high-quality DRI and has been targeted for completion in July 2010. “It is a matter of great pride that Pakistan will be producing one of the most preferred raw materials for quality DRI steel making.”

ISLAMABAD (APP) - The engineering goods export have the capacity to touch $5 billion target in next five years.According to Industrial Bulletin the country’s engineering goods export have potential markets in Central Africa and Latin America.It is expected that Pakistan could easily exploit these markets for a chunk out of more than $165 billion markets.At present, countries per year engineering goods total export are only $0.7 billion.Rizwan Qadir from Qadbros Engg (Pvt) told Industrial Bulletin that bright prospects are emerging for the export in the future.However, Rizwan urged upon government to take measures to support the engineering industry as engineering export is getting competitiveness in price and product wise.Engineering products export would bring foreign exchange in our national exchequer and reduce the intensity of unemployment in the country, said Qadir.

ISLAMABAD: CEO Engineering Development Board (EDB) Asad Elahi on Thursday expressed faith on huge potential and energy of the engineering industry of Pakistan and said it could repeat the performance of 60s by increasing export manifold.

He said Pakistan had no presence in some markets including Africa and could make a name if serious efforts were made to market products. He was addressing the first meeting of the ‘working group’ formed by the board to formulate medium and long-term export plan for engineering industry. The group comprises representatives of export-oriented engineering sub-sector as well as related government agencies. It would deliberate on various issue and problems confronting the engineering sector at the sub-sectoral level and develop a National Engineering Exports Development Strategy (NEEDS) to achieve a quantum leap in export growth. Rizwan Qadri a leading exporter of engineering goods has been appointed as its convener.

The CEO said the board had diversified its functions and was working on various sectors. After finalising steel policy the EDB had completed electronic goods policy. He said the board was working on ‘foundry policy’. He appreciated the role of stakeholders in formulation of these policies and said the board was pursuing in real sense the concept of public-private partnership.

The group reviewed the vision, mission, work plan and methodology prepared for NEEDS by the stakeholders of engineering industry globally integrated and capable of exporting engineering solutions, goods and services to the satisfaction of international market as per norms of quality, cost and delivery and by doing so provide engineering backbone to national economy as its engine of growth.

The mission of the working group was to have an exponential growth in export of engineering goods and services by way of, enhancement of capacities to achieve economies of scale and exportable surplus, adoption of efficient and cost effective manufacturing practices, reduction in costs of doing business, adherence to the standards and quality, improvement in entrepreneurship and managerial skills, improvement in skill set of work force, investment in newer technologies, development of the engineering procurement contract (EPC) companies, become part of global supply chain, research and development for product improvement, inculcation of an export culture in engineering industry and improvement in regulatory and facilitation regimes.

The working group would also deliberate on the methodology of production data, import data, export data, exportable surplus, quality and standards, manufacturing practices, managerial capability, financial issues, certifications involved, analysis of target markets, strengths and weaknesses, analysis of regulatory and facilitation environment, marketing, market access and FTAs/RTAs and analysis of commercial practices. The group would provide their inputs and finalise it. The ‘working group’ would constitute as medium and long-term strategy for export of 16 segments of engineering industry including structural changes in these areas to meet the global demand of value added products.

It may be recalled that the engineering sector of Pakistan produces a diversified range of products and possesses all ingredients to become part of the global sourcing chain. The industry, however, has been experiencing issues that have resulted in low exports of the engineering goods. Major issues that have historically impeded export growth of this vital sector include low scales of production, obsolescence of technologies, lack of knowledge about export markets and their requirements, inadequate human resource, competitiveness and innovation issues, shop floor factors, standards and certifications issues as well as availability of finance at competitive interest rates etc.

More importantly, the requisite culture and mindset to export could also not develop in this sector due to absence of a national strategy for the engineering sector.

The working group would review overall performance of the engineering industry of Pakistan during the last five years with regard to development, growth, technological advancement and exports. It will carryout sectoral analysis for engineering sub-sectors with the objective to identify products having export potential, marketing strategy targeting countries that could provide potential export markets for Pakistani engineering goods.

The group would identify products to which market access had been provided under FTA’s signed with different countries and to develop strategy for marketing these products in FTA partner countries. The group would analyse export-financing facility, financial support needs of the engineering industry for enhancing engineering export. It would assess product-testing infrastructures, testing facilities available in Pakistan and develop a framework for up-gradation of the identified laboratories and their international accreditation with involvement of related government bodies.

Riwan Qadri, convener of the group underlined the importance of higher exports in economic development of the country in his address. The group had been given the target to finish the job by March 2010. All stakeholders of engineering industry attended the meeting.

ISLAMABAD: Stakeholders from engineering sector, who gathered here Thursday, urged the government to focus on engineering sector’s development and its exports, which could take Pakistan to the ranks of middle-income countries.

The government pampered the textile sector for the last six decades and about 60 per cent of the economy relies on it, but being dependent on the nature makes it unreliable, this was the gist of one-day consultative workshop on the National Engineering Exports Development Strategy (NEEDS).

The Engineering Development Board (EDB) organised the workshop that was attended by about 150 major stakeholders from engineering sector, economists, and many from public sector.

They proposed setting up of EXIM (export-import) bank, business support centre, laboratories, and industry specific training institutions.

Razzaq Dawood, Chairman DESCON, said that for the last 60 years the economy is relying on textile-based industry, which is entirely dependent on nature.

“If we want to lead Pakistan to $70 billion exports target, the textile would not take us to that level. The government should focus on engineering, chemical and information technology (IT) development.”

Governor Khyber-Pukhtunkhwa, Awais Ahmed Ghani, being the chief guest said that the government should focus on developing the technology and engineering sector. The Engineering Industry should raise itself to the challenges and emerge as an engine of economic revival, he said. Minister for Industries and Production, Mir Hazar Khan Bijarani, underlined the critical role of the engineering industry in the economy due to its backward and forward linkages and high-multiple effects and creation of quality jobs for educated workforce.

He assured that the government will give more priority in providing training to increasing manpower needs, besides bringing structure changes in policies, institutions and overall environment to facilitate the engineering industry to play its due role.

Dr. Anayyatulla Durrani, State Minister of Industries and Production, in his address said that engineering industry has come a long way in terms of development and self-belief and described the workshop as a reflection of urgency by them to succeed.

ISLAMABAD: Federal Minister for Industries & Production Mir Hazar Khan Bijarani said the Tractor Manufacturers Association of Pakistan have to increased their production capacity to their maximum level. The minister said it during a meeting of the Tractor Manufacturers Association of Pakistan on Tuesday. Chairman of the association, Sikandar Tariq apprised the minister and other participants of the meeting that 93 percent parts of tractors are made locally. Therefore, Pakistan-made tractors are believed to be cheapest the world over, and around 40 percent cheaper than India.

ISLAMABAD: During the current financial year, Heavy Mechanical Complex (HMC), Taxila has attained a break even by earning revenue of two billion rupees with a nominal profit.

This was informed in a meeting of the board of directors of the complex at HMC Taxila with the Federal Minister for Industries and Production, Mir Hazar Khan Bijarani, in the chair. Secretary Industries and Production Abdul Ghafar Somoro was also present besides other directors of the company.

The HMC has also entered the field of manufacturing equipment for hydro electric power plants. It has so far manufactured equipment for Ghazi Brotha Hydro Power Plant, Malakand-III Hydro Power Plant, Warsak Hydro Power Plant and a number of mini hydro power plants in the Northern Areas. Presently, it has in hand orders for manufacture of equipments for small hydro power plants in Azad Kashmir.

The minister and visitors also took a round of the various workshops of the complex. While talking to journalists, the minister appreciated the workmanship and quality of HMC products. He also highlighted the role of HMC in the development of heavy engineering industry in Pakistan.

Dr Muhammad Ashraf Butt Managing Director, HMC Taxila welcomed the distinguished guests on arrival at the HMC and briefed them about the background, present activities and future plans of the Heavy Mechanical Complex.

ISLAMABAD: Federal Minister for Industries and Production, Mir Hazar Khan Bijarani, praised the work done by Engineering Development Board (EDB) and underlined the need of enhancing exports of Pakistani engineering goods to global markets, especially to the African Countries. He expressed these views during a presentation given on the working of the Board by CEO, EDB, Asad Elahi, here today.

He appreciated EDB’s motto, “World is our market for engineering goods”. He also suggested extension in the EDB’s work in order to make it effective business support organization and apex body of engineering sector.

Secretary Ministry of Industries and Production, Abdul Ghaffar Soomro, emphasized the need of giving a special place to engineering sector in overall economic planning of the government. He also suggested that reports of EDB should be used in preparation of Industrial Policy.

Earlier, CEO EDB, Asad Elahi, highlighted the work done by the Board for budget exercise 2010-11 in his presentation. He said the Board has forwarded 200 proposals to the FBR for adjustment of duty structure of the industry. It has received 2000 proposals from stakeholders, which were examined and finalized by the 15 sectoral committees, constituted on engineering and allied sectors. The memberships of these committees were given to prominent experts, manufacturers, consumers and representatives of concerned ministries and organizations. Each committee was headed by an experienced and renowned industrialist as its convener. These were assigned the task to redress the tariff and other related issues of the concerned local industry affecting their competitiveness, further expansion, and entrance into global market.

Several invitations for budget proposals were also sent to industrial stakeholders including associations, chambers, and manufacturers of engineering and allied products as well as the consumers of such products. staff report

KARACHI: Indus Motor Company Limited (IMC), a joint venture of Toyota Motor Corporation, Toyota Tsusho Corporation and House of Habib, plans to expand and roll out the Phase II of Press Shop in 2010/11 for making additional body parts as part of its long-term strategy in Pakistan, a company statement said on Wednesday.

During a recent meeting, the board of directors showed confidence in the long-term potential of the local automobile industry, reiterating their confidence in the balanced long-term policies of the government.

The board approved Rs1.6 billion investment plan involving purchase of latest technology, including stamping press machines and other equipment, which the company acquired in 2008. This investment will further enhance transfer of technology, create more employment opportunities and above all, foster localisation of parts, it said.

IMC appreciated the government for coming up with a balanced and progressive budget, which would help maintain stable macroeconomic environment for future expansions and growth of the automobile industry and LSM sector, at large.

KARACHI: The export of buses to the United Arab Emirates (UAE) by Hinopak is starting and the first batch of 25 buses will be shipped in the current month to the Emirates Transport, UAE primarily for transportation of schools.

Hinopak Director Sales and Marketing Muhammad Irfan Shaikh said this while addressing the export ceremony of the first batch of 25 units of Hino AK8J Buses to UAE. .

Irfan said that by successfully meeting international standards in export quality, Hinopak in collaboration with its principals, is continuously striving to tap other prospective markets such as Saudi Arabia, Qatar, Oman, Kuwait, Egypt, Bahrain, UAE, Jordan and many inquiries are in the pipeline from Panama, Mozambique, Cost Rica and Sub Sahara countries. He mentioned that Hinopak has invested huge amount of money to renovate its body operation plant by keeping in view the expected orders of export from different parts of the world.

Provincial Transport Minister Akhtar Ali Jadoon said that the Sindh government is planning to operate 100 diesel buses in Karachi soon under the Benazir Transport Programme. He said that CNG bus project with 400 units would also start soon.

Trade Development Authority of Pakistan Chief Executive Mohibullah Shah appreciated Hinopak’s efforts and highlighted that for the past several years the economy of Pakistan has been undergoing a slump, marred by both international and domestic factors directly affecting the trade sector very badly.

He further added that this export segment would not only bring honour and fame, but would definitely strengthen the image of Pakistan around the world and help the country in narrowing down the trade imbalance.

Hinopak Managing Director and CEO Hideya Iijima said that these buses are especially designed considering the geographic, climatic and economical conditions of the destined country. He also said that one of the key features of Hinopak buses is the option of massive customisation in all aspects of the bus body from layouts, seating arrangements to various colour schemes.

Business Recorder Logo KARACHI (November 02, 2010) : All automobile manufacturers and vendors have increased their capacities by making large investments of over Rs 50 billion in the last few years to meet the growing demand in the country, according to figures available here on Monday.

Of these, the three large original equipment manufacturers (OEMs)--Pakistan Suzuki, Honda and Toyota--alone have invested over Rs 20 billion during the last four years. This has resulted in capacity increase of the OEMs. Total capacity of Pak Suzuki, Honda and Toyota has increased by over 100 percent during the last five years, which has brought direct employment of over 5,500 persons by the OEMs. At the same time, the industry also supports employment of over 1,392,000 persons--by vendors, suppliers and dealers.

According to Pakistan Automobile Manufacturers Association (PAMA), Pakistan's automotive industry, which is represented by world-renowned automobile manufacturers, like Hyundai, Honda, Suzuki and Toyota, is currently in the formative stage.

There are about 400 Tier-1 auto-parts manufacturers (APMs), in addition to 1,600 other APMs supplying to Tier-1 units. Manufacturers have a countrywide outreach through network of over 12,535 dealerships. The industry is nurturing growth in the country through significant contribution to national exchequer and GDP, saving valuable foreign exchange through value-addition, employment generation (APMs 150,00 and OEMs 5,000), transfer of technology through technical assistance agreements (TAA) and joint ventures (JVs), major investments and continued localisation. It is a strategic industry with mushrooming impact on economy.

Figures provided by PAMA show that the auto market in Pakistan was stagnant from around 1989-90 to 2001-02 due to inconsistent policies, government changes, and slow economic growth. The market then witnessed a rapid growth phase until 2006-07 due to stable government, economic growth, availability of auto financing, long-term auto policy, workers' remittance, and infrastructure development. The market, however, then rapidly declined due to political change, law and order situation, economic growth slowdown, lower auto financing, inflation, and high input costs.

On the challenges of a declining auto market, PAMA said that two continuous years of decline created enormous hardships for both the OEMs and the auto part suppliers. OEMs/suppliers had to resort to production cutbacks and workforce layoffs. Indus Motor Company (IMC) had 5-6 non-production days/month that were utilised for training and did not lay off any personnel. There was a layoff of more than 50,000 workers by the vendor industry. There also was significant loss to exchequer, while suppliers faced extreme financial hardship after production cutbacks.

Pakistan Economic Survey 2009-10 figures show that total revenue collection in 2009-10 was Rs 1,380 billion. Indus Motor contributed around 1.5 percent of total revenue collection in 2009-10 (Indus Motor share alone is around 56 percent of total collection from auto assembling industry during 2009-10).

The government policy, as articulated in Auto Industry Development Program (AIDP), was essential for realisation of the long-term objectives. Tariffs and additional duties were imposed that impacted growth directly. Complete Knocked Down (CKD) rate of duty is 32.5 percent for passenger cars. However, if any item is on A-Max (parts localised by any OEM) then the OEM has to pay punitive 50 percent rate of duty. New cars of same engine capacity as locally produced cars are freely importable. Pakistan has the most liberal policy for used cars import in the whole region.

The AIDP objectives were: long-term investment, encourage growth, enhance domestic competition, stimulate innovation, used vehicles import policy be regulated so that growth of local industry is not impeded and consumer interest is protected, further encourage indigenisation, and facilitate auto industry's integration into the global supply chain.

PAMA's view on used cars--characteristics of car imports and trading--is that this arrangement has short-term benefit with very little employment and no technology transfer. It is prone to malpractices. Used imported cars have limited after-sale service and no warranties as it is roadside operation resulting in high maintenance and spares cost. In addition, there is flight of capital and little GDP revenue. It has no contribution to GDP and economic growth, and is dependent on foreign sources. There is no import substitution, no investment, and it supports the foreign auto industry.

As against this, local car manufacturing has long-term benefits. It provides employment to over 400,000 people. There is transfer of technology to OEMs, vendors and dealers. There are fully documented transactions, significant contribution to GDP and economic growth, foreign exchange savings and substantial government of Pakistan revenues. It is an integrated industry with 35 dealerships giving full after-sales and warranties, resulting in low maintenance and spares costs. The set-up is very capital-intensive, with significant import substitution, supports local auto industry, and is a move towards self-reliance.

IMC is a joint venture of Toyota Motor Corporation, Toyota Tsusho Corporation and House of Habib. It produced auto parts worth approximately Rs 16 billion through 60 different local suppliers in fiscal year 2009-10. To-date, this is the highest localisation effort by any OEM, both in terms of volume and value. Large investments in localisation, coupled with streamlined output, helped IMC achieve record production of 50,557 units in 2009-2010, as compared to 34,298 units in the previous year.

There are several major challenges faced by auto manufacturers, lead time for supply of CKD parts being a critical element in manufacturing process. The average lead time from the principals to fulfil any change in demand pattern is 60 days (in some cases 90-120 days). This industry has longer lead time levels for arrangements of parts from principals as well as local vendors. Sometimes there can be delays in delivery. The supply chain to produce automobile is very complex and in many cases parts are received from Japan, Thailand, Malaysia, Indonesia, Taiwan and Vietnam. The vendors also have a very complicated supply chain for certain raw materials. It is difficult to immediately react to changes in demand.

The current challenges include quality and timing of new model launches, current production quality targets, on-time delivery challenges from suppliers, and cost-competitiveness of suppliers. PAMA strongly feels that there is need for a stable policy to allow the auto industry to plan effectively for future models and expansions.

The government should not impose higher duty on the high-tech parts that cannot be localised due to non-availability of technology and current low volume. Such an action would result in further increase in cost to the consumer. The government should continue the ban on import of used vehicles that are more than three years old while maintaining the current depreciation allowance.

ISLAMABAD: A Chinese firm, Amlong has shown interest in setting up a steel mill with a capacity of one million tons at Kalabagh, to utilise local iron ore deposits, said an Engineering Development Board (EDB) statement issued on Wednesday.

The company officials have already held a meeting with the ministry of industries and production.

On the directives of the ministry of industries and production, EDB gave a detailed presentation on the iron-ore deposits available at Makarwal and Chichali and other raw materials available in the same vicinity to the company’s officials.

The delegation showed keen interest in the project and requested CEO, EDB, Aitazaz A Niazi to arrange a visit to the site. Accordingly, a seven- member delegation led by SM Adil Shah, General Manager, EDB visited Makarwal and Chichali iron ore deposits on January 10-11.

The proven reserves at Kalabagh iron ore deposit, which is the largest one in Pakistan, are around 350 million tons. In addition, the iron ore deposits in Makarwal range, which are spread over an 83-kilometre belt up to Pezu district in Bannu, are estimated to be around 600 million tons.

The Daily Times reported that a Chinese firm, AMLONG has shown interest in setting up a steel mill of 1 million tonnes at Kalabagh based on local iron ore deposits.

The Chinese Prime Minister during his recent visit to Pakistan was accompanied by over 200 delegates, including high officials, industrialists, businessmen and investors. AMLONG was also part of the delegation.

The company officials held meetings with various government organizations including Ministry of Industries and Production, said an EDB statement issued on Wednesday.

On the directives of the Ministry of Industries & Production, Engineering Development Board gave a detailed presentation on the iron ore deposits available at Makarwal and Chichali and other raw materials available in the same vicinity.

The delegation showed keen interest in the project and requested CEO EDB Aitazaz A. Niazi to arrange a visit to the site. Accordingly, a seven-member delegation led by S.M. Adil Shah, General Manager, EDB visited Makarwal/ Chichali iron ore deposits on January 10-11.

The officials of AMLONG expressed satisfaction on the iron ore deposits available at Kalabagh, the infrastructure and the proposed site for establishment of the steel mill.

SH Farooqi, a leading geologist briefed the delegation about the iron ore deposits in the area and prospects of a steel mill setup based on local iron ore.

The delegation was provided all the necessary information including maps, composition of the ores, quantum of deposits and reports prepared in the past.

The proven reserves at the Kalabagh iron ore deposit, which is the largest one in Pakistan, are around 350 million tonnes.

In addition, the iron ore deposits in Makerwal range which are spread over 83 km long belt up to Pezu district Bannu, are estimated to be around 600 million tonnes. Iron (Fe) content varies between 32 to 38.6%.

* Existing manufacturers interest must be protected against new players

By Moonis Ahmed

KARACHI: Indus Motor Corporation (IMC) will invest Rs 1.5 billion more on the expansion of its highly-advanced press shop in the manufacturing plant by August 2011.

According to the officials, the company is working aggressively to culminate the operations of second phase of the press shop to achieve the maximum level of localisation in the production of vehicles. An amount of Rs 3.5 billion is estimated to be spent on the press shop, Rs 2 billion and Rs 1.5 billion on phase one and two respectively.

Director Sales & Marketing IMC, Raza Ansari while talking to a group of journalists said that the establishment of full-fledged press shop in IMC will increase its level of self-sufficiency in the production of hundreds of car parts locally, adding the company’s cost of production will decrease and its benefit will be passed on to customers.

“The maximum localisation level will not only save foreign exchange of the country but will also stabilise prices of its vehicle on the other hand,” Raza said.

The first phase of the press shop has been completed successfully with the investment of Rs 2 billion, which enabled IMC to manufacture doors, floors and other auto parts in its on production units rather than their imports.

IMC has slashed the prices on its different brands of automobiles up to Rs 40,000 per unit — and subsequently its cost of production was curtailed on the significant localisation in manufacturing unit.

The company had passed on the benefit to the customers forthwith after it made substantial success as part of progressive deletion plans in its manufacturing unit.

“The press shop has contributed heavily to deletion programme that will directly benefit the customers on the purchase of different models of IMC,” Raza added.

He said that IMC has fulfilled its agreement with Engineering Development Board (EDB) to reduce the rates to achieve the government goals towards localisation of automobile industry.

Replying to a query about the government’s new entrance policy for the automobile sector, he said that new players are also welcome but “the government must ensure us that interests of the present manufacturers would not be hurt.”

He said that if the interest of the existing auto manufacturers is protected and no other incentives are given to new players, which affects the interest of existing assemblers, then the government should encourage them to come in the market. “The government must ensure us that CKD import tariff will be same to new players as of existing players”, he said.

It is pertinent to mention that the government is in talks with Chinese and South Korean vehicle manufacturers to come and invest in local market that will increase local market share and lead to reduction in prices.

Raza added that the government should continue consistent long-term policy towards the expansion of auto industry in order to generate large number of employment, investment and substantial share of revenues in national exchequer.

“The government should focus long-run benefits in its policy to get the fruitful results in future,” he added. The automotive makers expanded production capacity to meet the growing local demand single-handedly in the past, now the same criterion should be applied for new entrants in the local market to ensure level playing field for all.

He mentioned the prices of IMC-manufactured cars have increased seven percent in the last couple of years though the cost of production increased 26 percent besides appreciation of Japanese currency and dollar recorded 22 percent and 6 percent against rupee respectively.

IMC-made cars are still low-priced as against car prices in India and Thailand. The prices may be further reduced as automobile makers in collaboration with dealers are working to curtail the menace of premium money.

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ISLAMABAD: To bridge demand-supply gap of power generation plants in the country, the government has decided to upgrade the Heaving Mechanical Complex (HMC) with a cost of Rs 21.543 billion by manufacturing of turbines and other equipment for power generation plants, sources told Daily Times on Monday.

According to the scheme, the government wanted to upgrade the existing facilities of manufacturing power equipments, especially turbine manufacturing, which would create a positive impact on the country’s economy, as it would reduce the import cost of such items. The basic purpose of the project is to establish local facility for manufacture of turbines and other equipment for power generation plants. Sources said that the scheme would help in boosting country exports, particularly high-tech engineering goods, whose share at present was negligible as compared with other countries. It would also help in reducing dependence on foreign countries for equipments, thus reducing the gap of trade deficit.

The HMC was established in 1971 with the purpose of producing capital and producer goods. Its main focus was to substitute imported capital goods by producing them locally. In certain sectors it achieved success, nevertheless in power and energy sector its growth was halted due to lack of engineering, design, and other requisite facilities. The sources claimed that the required infrastructure, utilities and space were available to establish the project.

The sources said that the project on completion would manufacture power plant equipments, especially turbines. The turbine manufacturing involved casting, forging, fabrication, machining process, and assembly of its different parts. The HMC have requisite skills for manufacturing these equipments, but the existing facilities need to be upgraded. The project was expected to be completed in three years and would provide employment to 199 persons directly, the sources maintained.

Officials said that over-dependence on imported machinery often halts the projects implementation that was why the government decided to manufacture locally turbine and overcome power crises with cheaper availability of inputs/equipment.

About breakdown of the cost, the sources said that Design and Technical Services of the project would cost Rs 1.151 billion, machinery and equipment Rs 12.778 billion, buildings Rs 2.948 billion, duties, taxes, freight, installation and contingencies will cost Rs 4.096 billion, while the manpower cost of the project is Rs 568.82 million.

The sources further said that the country these days is facing severe energy crises, particularly electricity shortage. The proposed project aims to establish facilities for power generation. The turbine would be created by adding some new equipment and upgrading some existing facilities at HMC, Taxila, the sources maintained. The scheme would help in overcoming energy shortage by providing ready-made power generation equipments besides enabling the government to manufacture complete power plants, reduce foreign trade deficit, increase exports, and provide employment opportunities.

The sources further said that the initially they would manufacture rotors for turbines and use imported blades and subsequently they would go for blade designing and manufacturing.

ISLAMABAD: To bridge demand-supply gap of power generation plants in the country, the government has decided to upgrade the Heaving Mechanical Complex (HMC) with a cost of Rs 21.543 billion by manufacturing of turbines and other equipment for power generation plants, sources told Daily Times on Monday.

According to the scheme, the government wanted to upgrade the existing facilities of manufacturing power equipments, especially turbine manufacturing, which would create a positive impact on the country’s economy, as it would reduce the import cost of such items. The basic purpose of the project is to establish local facility for manufacture of turbines and other equipment for power generation plants. Sources said that the scheme would help in boosting country exports, particularly high-tech engineering goods, whose share at present was negligible as compared with other countries. It would also help in reducing dependence on foreign countries for equipments, thus reducing the gap of trade deficit.

The HMC was established in 1971 with the purpose of producing capital and producer goods. Its main focus was to substitute imported capital goods by producing them locally. In certain sectors it achieved success, nevertheless in power and energy sector its growth was halted due to lack of engineering, design, and other requisite facilities. The sources claimed that the required infrastructure, utilities and space were available to establish the project.

The sources said that the project on completion would manufacture power plant equipments, especially turbines. The turbine manufacturing involved casting, forging, fabrication, machining process, and assembly of its different parts. The HMC have requisite skills for manufacturing these equipments, but the existing facilities need to be upgraded. The project was expected to be completed in three years and would provide employment to 199 persons directly, the sources maintained.

Officials said that over-dependence on imported machinery often halts the projects implementation that was why the government decided to manufacture locally turbine and overcome power crises with cheaper availability of inputs/equipment.

About breakdown of the cost, the sources said that Design and Technical Services of the project would cost Rs 1.151 billion, machinery and equipment Rs 12.778 billion, buildings Rs 2.948 billion, duties, taxes, freight, installation and contingencies will cost Rs 4.096 billion, while the manpower cost of the project is Rs 568.82 million.

The sources further said that the country these days is facing severe energy crises, particularly electricity shortage. The proposed project aims to establish facilities for power generation. The turbine would be created by adding some new equipment and upgrading some existing facilities at HMC, Taxila, the sources maintained. The scheme would help in overcoming energy shortage by providing ready-made power generation equipments besides enabling the government to manufacture complete power plants, reduce foreign trade deficit, increase exports, and provide employment opportunities.

The sources further said that the initially they would manufacture rotors for turbines and use imported blades and subsequently they would go for blade designing and manufacturing.

KARACHI: Tuwairqi Steel Mills Limited (TSML), a subsidiary of Al Tuwairqi Holding of the Kingdom of Saudi Arabia, and STX Corporation of South Korea have agreed to collaborate, in a bid to advance TSML’s direct reduced iron (DRI) Plant by producing HBI. The two parties have reached a consensus during the recent meeting at TSML’s head office where Zaigham Adil Rizvi, Director Projects TSML and Sang-min HAN, Team Leader, STX Corporation signed an MoU.

Under the MoU, STX will support TSML in producing Hot-Briquetted iron (HBI) as well from TSML’s DRI Plant. HBI is a manufactured product with an identifiable production cost structure and year-round operation (no collection season like scrap), which allows producers the option to offer long-distance supply contracts.

On this occasion, Sang-min HAN, Team Leader, STX Corporation said, “We foresee an export potential to South Korea, Japan and China for HBI, produced in TSML, in the range of around 0.4 MTPA – 0.5 MTPA.” He informed that the use of low residual, high Fe content HBI, in combination with scrap and other metals such as ###### iron, provides steel makers more control over their cost of liquid steel when producing any grade of steel and the ability to compete in markets that are beyond the scope of a total scrap practice.

He further added “it is a matter of great pride for Pakistan that it would be producing one of the most preferred raw materials for quality steel making - HBI, upon the completion of the first phase of TSML.” He was of the view that currently, Pakistan is among the countries that rely mostly on imports, when it comes to heavy mechanical structures and engineering goods. “By producing high-quality steel within Pakistan, such equipment can be manufactured locally by value addition with the help of downstream industries,” he concluded.

Director (projects) TSML said, “DRI/HBI contains around 94% iron with very little impurities, which are removable. According to the latest statistics, DRI/HBI production, worldwide, has increased from 44 million tons in 2000, to over 56 million tons in 2010. ”

ISLAMABAD: Local vendors and manufacturers of wind turbines have been assured that Engineering Development Board (EDB) would provide them full assistance for indigenisation of their products.

Aitazaz A Niazi, Chief Executive Officer of EDB said while visiting M/s AGECO on Wednesday was informed that the firm has launched a turbine pilot project that operates on wind from traffic flow in the city for lighting of street and security lights.

The firm has designed a wind energy vertical turbine, which operates at availability of wind in the range of 2.1 meter to 7 meter per second against the maximum required range of 3.5 meter per second to generate 1.5 kw of energy in 24 hours. The locally designed wind energy turbine will cost Rs 200,000 per kw as compared to imported turbine costing Rs 1 million per kw.

The firm is working to install another wind turbine in the capital, which will generate 5 to 10 kw energy. Whereas on the firm’s request, EDB has taken up the matter with Chairman of CDA for issuing necessary permission.

CEO added that EDB has carried out an assessment of existing capabilities of local manufacturers for manufacturing wind turbine component and the potential for future expansion in capacity through transfer of technology. He appreciated the efforts of the firm and described it as a great service to the nation. He added that the government should give some incentives to the pioneer in the field.

International Steels Limited (ISL) was incorporated in 2007 by the International Industries Limited (IIL) with the vision to be the number 1 producer of steel products in Pakistan.

ISL is the largest private investment in the value-added flat-rolled and coated steel industry in Pakistan. This $130 million investment, with equity contributions from Sumitomo Corporation and the International Finance Corporation, will unlock the dormant potential for developing the country’s engineering and hi-tech manufacturing industries. This bold investment will create thousands of jobs, both as direct employment by ISL and related job opportunities in associated support industries. As a leading indicator of economic growth, the production of high quality cold rolled and galvanized steel will lead the economic development in Pakistan where the per capita steel consumption has to grow from a current low of 40kg per person to the world average of 200kg thereby boosting the enormous potential for economic development in the country.

This 250,000 tons per annum steel complex will initially produce cold rolled and metal coated steel sheets conforming to international standards (ASTM, JIS, etc.) from imported hot rolled coils. Pickling the hot band will be the first process step to remove the oxide layer from the surface prior to cold reduction in a reversing mill where the thickness will be reduced to the desired range of 0.27-1.6 mm. 100,000 tons of cold-rolled products will be offered to the industrial, engineering and manufacturing industry as a premium raw material for transformation into any number of value-added products for the domestic and export markets. The balance 150,000 tons will be hot-dip galvanized for similar industries for applications that require excellent corrosion resistance and for exposed outdoor applications. Both products will be offered as coils or sheets as per the customer's needs.

ISL will produce hot dip coated galvanized sheet on a highly automated continuous hot dip coating line where the cold rolled steel sheet is cleaned and annealed in a continuous NOX furnace before being immersed in a molten zinc bath under an inert atmosphere. The molten zinc forms a metallurgical bond with the steel and protects the substrate by sacrificial protection mechanism; the zinc sacrifices itself to protect the steel against corrosion. The ISL facilities are capable of producing 1220 mm wide sheet in a range of thicknesses suitable for a variety of construction, appliances, automotive, agriculture, packaging, and several additional engineering and manufacturing industries. Cold roll steel will be available in thicknesses ranging from 0.27 mm to 1.6 mm while galvanized sheet will be available in thicknesses of 0.27 mm to 1.2 mm. Each product category will provide a range of strength levels from drawing to structural and surface finishes from bright to matt to satisfy a spectrum of customer specification.

With planned expansion, the production annual capacity can be increased to 0.5 million tons. Downstream integration will provide additional products which will serve to catalyze the country’s industrial production for export and domestic consumption. The initial production capacity will substitute at least 30% of Pakistan’s steel imports thus conserving valuable foreign exchange for the country.

2nd and final round of Pak-China Joint Energy Working GroupPakistan urged to solve issues confronted by Chinese companiesWednesday, May 09, 2012

By Zeeshan Javaid

ISLAMABAD: Without pledging any single penny for mega and small power generation projects, China urged Pakistan to facilitate and resolve the issues faced by Chinese enterprises involved in energy cooperation.

The 2nd and final round of Pak-China Joint Energy Working Group (JEWG) was held here with Federal Minister of Water and Power Naveed Qamar in chair and Wu a person in charge of Chinese delegation to review the financial and other aspects of projects related to energy cooperation.

In a joint statement of Pak-China energy managers, Wu said that ongoing energy crisis in Pakistan could be resolved my mutual energy cooperation of both sides, adding, "We believe energy cooperation between Pakistan and China should continue and future of both is bright."

He expressed serious reservations of Chinese manufacturing company Dong Fang in context of more than 40,000 tonnes heavy machinery and equipment having Cost and Freight (C&F) cost of $85 million for 450 megawatts (MW) Nandipur Hydropower project, which has been detained at the Karachi port since last two years. He further maintained that Pakistani authorities should consider seriously the concerns of Dong Fang and should take measures on war footing basis to release the machinery and equipments and resolve the issue of demurrage charges.

Qamar assured the Chinese official of complete support to Chinese entrepreneurs, who have been interested or involved in joint energy development projects.

He said that Chinese authorities gave positive response in context of financing different mega and small energy power projects including 969 MW Neelum Jehlum Hydropower Project (NJHP) costing $3.6 billion, 1,100 MW Kohala Hydropower Project (KHP) costing $2.2 billion as well as more than 17 other hydro, renewable and clean energy hydro power projects.

GENCO Holding Company's Naveed Ismail apologised to the Chinese authority on behalf of the federal government, Pakistan Electric Power Company (PEPCO) and GENCO over concerns raised by Chinese enterprise Dong Fang involved in Nandipur Hydropower project and assured to resolve the grievances of partners.

He added that the power sector is fully involved with the Ministry of Finance to resolve the issue of demurrage charges, adding 'within the next few days, a summary will be sent to the Economic Coordination Committee meeting to waive off the charges and hope so it would be resolved till August 2012'.

The Chinese officials urged Pakistan to form a comprehensive power development plan in order to achieve better energy output.

While addressing the grievances of Chinese enterprises, the federal minister maintained that the federal government would soon send a high-level delegation comprising financial and legal managers to discuss and settle down the concerns of both partners. He also maintained that the issue raised by Chinese authorities regarding issuance of No-Objection Certificate would be addressed on immediate basis and concrete decision would be taken on war footing basis to resolve the issue.

He appraised the significance progress of Chinese enterprises 'Three Gorges Dam' involved in 1,100 MW Kohala Hydropower as well as other renewable energy projects and expressed satisfactory mood over positive indications of financing for NJHP, KHP, Nandipur and several other mega and small energy development projects.

Qamar urged for financing for particularly mega hydropower projects, which would definitely be helpful in the near future to overcome the ongoing energy crisis in Pakistan.

He said that the contact of laying transmission lines under UCH-I, Guddu and NJHP would be awarded to those companies either Chinese or local, who will win International Competition Bidding (ICB) besides awarding in support of Memorandum of Understanding (MoU), adding "To expedite the process, the advertisement for ICB would be published soon," Qamar maintained.

He also informed the Chinese delegation that the government of Pakistan has been working over the offer made by China for grant of $5 million in last meeting of Pak-China JEWG.

Pakistani authorities also expressed their keen interest over the proposal of Infrastructure Fund discussed in last JEWG meeting held in Beijing in August 2011 and stressed over formation of Banking Consortium to finance the infrastructure development.

Addressing some other concerns from Chinese Enterprises, head of delegation, Wu said that infrastructure development is the need of time to mature the ongoing and forthcoming energy development projects for easy transportation of machinery and equipments on the site.

Later, signing ceremony of three different wind energy projects was held including inking Letter of Indent on 150 MW wind energy project between United Energy Pakistan Limited and China Development Bank Cooperation, inking MoU of 350 MW wind energy project between Three Gorges and Pakistani authorities and document inked between Dawood Power Private Limited and Hydro China Engineering Company Limited for 50 MW power project.

KARACHI: The government will support the manufacturers through prudent policies and encourage them to enhance the capacity and transfers of technology which will not only benefit local consumers but also increase exports of ‘Made in Pakistan’ motorcycles, said Chairman Federal Board of Revenue (FBR), Mumtaz Haider Rizvi.

While inaugurating Atlas Honda motorcycle’s production capacity enhancement to 0.75 million bikes a year alongwith Kenji Kawaguchi, President Honda R&D Southeast Asia, he said he was looking forward to Atlas Honda’s next landmark of achieving production and sales targets of 1 million motorcycles a year, as it would be a direct support to achieve FBR’s revenue collection targets.

He asked the visiting officials of Honda Japan to take another leap forward and plan for producing 2 million motorcycles not only for local market but to tap the regional markets as well.

Pakistan is the country of 180 million people which could be considered amongst the biggest markets of motorcycles while it has immaculate and talented workforce besides a thriving economy which is a most suitable recipe for planning further investments.

Atlas Honda’s plant enhancement capacity has been increased from 600,000 units to 750,000 units a year with the investment of $35 million.

This unit is not only to save valuable foreign exchange by deleting 94 percent of the motorcycle parts but also to earn foreign exchange through exports, he said.

Kenji Kawaguchi assured consistent policies from the government and continuous support from FBR would encourage Honda Japan to increase its role in Pakistani motorcycle market’s development.

“I am expecting from Honda to introduce several new and improved models in the coming years in order to serve better the Pakistani customers”.

Chief Executive Atlas Honda, Saquib Shirazi announced the company would now be undertaking a feasibility study for an expansion project to increase annual production of motorcycles to 1 million units, which was estimated to cost around an additional $50 millio.

Besides having 94 percent localisation of our brands, our exports have doubled this year to around 20,000 units, while we are hopeful to achieve our export target of 100,000 units in next three to five years, he added.

ISLAMABAD, July 5: Belarus has expressed keen desire to explore investment opportunities in Pakistan for assembling and manufacture of heavy vehicles, and for this, it is seeking collaboration with military organisations.According to the Board of Investment, the Minsk Automobile Plant, a state-run automotive plant manufacturer of Belarus, is already in contact with Pakistan Army for a possible joint collaboration for production of heavy vehicles.The Minsk plant manufactures heavy-duty trucks, buses, trolley-buses, tractors, semi-trailers for semi-trailer trucks and cranes.Finding Pakistan an ideal country for investment by virtue of lower cost of production, low taxes and cheap labour, Belarus has shown interest in production of tractors and heavy vehicles and is prepared to set up a plant at the Special Economic Zone (SEZ) being set up by the government.Moreover, removal of five per cent excise duty and fall in steel prices have massively reduced cost of production of vehicles in Pakistan.The draft Special Economic Zones (SEZ) Bill 2011 has already been approved by the Senate Standing Committee on Law which is being framed to create cluster of manufacturing investors with effective and efficient infrastructure to compete globally and will offer incentives to investors.A Belarus delegation headed by Sergey Romanov of the Minsk Automobile Plant, currently visiting Pakistan, met Chairman of Board of Investment Saleem H. Mandviwalla here on Thursday to explore investment opportunities in the field of assembly and manufacturing of heavy vehicles in Pakistan.The EDB is implementing the Auto Industry Development Programme (AIDP) with the target to increase the GDP contribution of the automotive sector to 5.6 per cent.

KARACHI: Pakistan will be amongst the top five countries producing and exporting high quality motorcycles in the next few years, said T Oyama, senior managing director of Honda Motor Company Japan at the launch ceremony of the firm’s new model Pridor, said a press statement.

With the hard work of associates, Atlas Honda today stands at the turning point from where the sales and production will touch the ever highest in the history of the country, he said.

It is encouraging that after investing $35 million this year, Atlas Honda has increased its motorcycle production capacity to 750,000 vehicles annually keeping in mind the growing local demand, one of the largest motorcycle markets in the world, and export potential to regional countries, he said.

The leading motorcycle manufacturer is currently conducting a study for an expansion to 1 million units’ production capacity, which is estimated to cost around an additional $50 million.

He said that the seed of relationship sown by Atlas Group Pakistan’s Yusuf H. Shirazi and Suichiro of Honda Japan is today the oldest joint venture of Honda Motor Company anywhere in the world i.e. Atlas Honda Ltd.

By launching yet another state of the art model Pridor, surpassing all available technologies in the country, Atlas Honda has also proven its commitment to Pakistan’s market, he said. He said that it is very encouraging to know the government of Pakistan is supporting localisation in the country; especially the recent decision of Economic Coordination Committee depicts the government’s localisation friendly policy. Aoyama, GM Motorcycle Business Planning, Honda Motor Japan, expressed gratitude to the Pakistani customers for their confidence in Honda with the assurance that Honda will continue to bring new models with same great quality which is their hallmark.

Aamir Shirazi, president of Atlas Group, said: “the presence of top management of Honda Japan is a source of encouragement for us all and we take it as an expression of their confidence in the product Pridor”.

CEO of Atlas Honda, Saquib Shirazi said the state of the art driving machine Pridor exceeds the emission standards Euro II while setting yet higher benchmarks to be followed by its competitors as our bikes are very attractive for low income mass markets. He said the new technology goes hand in hand with new investment, “The vision of our government regarding the new technology is very supportive for new investment to be brought in to the country”.

Atlas Honda is exploring huge export potential in third world countries like Sri Lanka, Bangladesh, Afghanistan and some African countries. Atlas Honda, he said, is bringing its dealers, service mechanics and customers to our plants at Shaikhupura and Karachi to show them the state of the art manufacturing facilities so that they should take back the confidence that Honda is ready for production of one million bikes.

ISLAMABAD - The Czech Republic has showed keen interest to enhance economic cooperation with Pakistan, said MoS/Chairman BoI Saleem H Mandviwalla.On the sidelines of an investment conference in Czech Republic, Mandviwalla held several successful meetings with Pavel Bem, Chairman Inter-parliamentary Friendship Group, Czech-Pak in the Parliament of Czech Repubic, Martin Kuba, Minister of Industry and Trade, Jaroslav Hanak, President of the Confederation of Industry of the Czech Republic.Both the sides decided that there is great potential in cooperation between Pakistan and Czech Republic especially in hydro, wind and coal industries. The Czech side showed keen interest to invest in various sectors including steel sector, heavy machinery and auto sector.The MoS/Chairman BoI informed that at present the total production of steel mills could be enhanced. The annual demand of the country is 8.4 million tons, while the current steel production is 4.9 million tons. The current Czech investment would help to bridge in the gap between the demand and supply of steel in Pakistan, and would boost the steel industry.In energy initially a 50MW wind power plant would be installed in Sindh with the collaboration of the Sindh government and Wikov Wind and Wahaj Group. Also there is a plan to install a brass mill by the Czech company Vitkivice, in collaboration with the POF.The Czech companies and government are keen to cooperate with Pakistan and both the governments would help them to invest. It was discussed that governmental support is crucial to bring the two countries closer in terms of investment, trade, cultural, tourism and all other potential areas. Many productive business meetings were also held with representatives from many potential companies like Vitkovice, Skoda, NANOPROGRES, DT-Paintworks and Engineering Works, EKOL, TechniStone, Wikov Wind and Wahaj Group.Moreover, Jiri Nestoval, President CSOK, Chairman of Energy Holding, announced a visit to Pakistan with a cluster of Czech business community in Nov 2012. It was also decided by the two sides that they would jointly attend the BANRO Fair which would be held in September next year. The investment/business conference can be termed as a very successful one as it would help Pakistan get an access to EU market.

by Stela Pencheva20. 10. 2012Earlier this year, the government of Czech Prime Minister Petr Ne&#269;as announced it would support a diversification of Czech exports to decrease the heavy reliance of the Czech Republic on the troubled eurozone. Last month, Ne&#269;as added emphasis to these efforts when he criticised what he called irresponsible campaigns to promote dubious human rights causes which potentially hurt Czech exports.

The remarks were part of a speech at the Brno Engineering Fair, the traditional event that showcases Czech industry. While the statement drew fire from many quarters, not least of all from Karel Schwarzenberg, Ne&#269;as’ foreign minister, it probably did reassure many Czech businesses, which are indeed increasingly active in markets east of the eurozone.The government supports exports through three bodies. General information and business-to-business linkages are provided by the eponymous Czech Trade, which is the trade counterpart to the better known Czech Invest (charged with the task of bringing in foreign direct investment). More important are two other agencies, the Czech Export Bank and the Export Guaranty and Insurance Company (EGAP). These are relatively powerful, well-funded institutions through which the government can steer trade and investment.And in fact, in both trade and investment, the Czech Republic is beginning to punch above its weight, at least in the context of the new EU member states and even its relatively well-developed post-communist neighbours, the V4 countries.Headed EastThis can be illustrated by the behaviour of Czech companies in three countries where the biggest deals have been scored in the past twelve months – Russia, Pakistan and Bulgaria.First, Czechs seem to be successfully retaking their traditional market, Russia. When the then-President of the Russian Federation Dmitry Medvedev visited Prague last December, he was accompanied by a strong trade delegation. Deals worth 50 billion Czech crowns (about €2 billion) were signed, including a contract to build a 400-kilometre stretch of railway in the Urals region.Secondly, investments in Pakistan testify that Czech companies seem to be successfully penetrating new markets. In August, the Vitkovice Machinery Group signed a memorandum of understanding for a project worth 6 billion Czech crowns (€270 million) to build a steelworks in Pakistan. At about the same time, Prague-based Wikov Group concluded a deal to develop a wind power plant in the same country. Both are daring projects in relatively uncharted and risky territory. And while Vitkovice is a traditional industrial powerhouse, Wikow is a relatively new, small player. This illustrates another interesting fact: Czech exports and investments are not exclusively driven by large, traditional players.Thirdly, in June a privately held company from Moravia called EnergoPro bought the Bulgarian distribution grid of the German energy giant E.On. This was a surprise move, since EnergoPro is hardly a household name. However, industry insiders are quite familiar with the company.EnergoPro, which operates 15 hydroelectric plants in the Czech Republic, has been quietly building a portfolio of projects in a string of emerging market economies. Before it branched out into distribution, it operated 8 Bulgarian hydroelectric plants, and it has a presence in Turkey (5 plants), Armenia (one power plant project in development) and Georgia. In Georgia, the company operates 15 hydroelectric power plants and controls power distribution in about 70% of the country. Thanks to this and some smaller investments in mechanical engineering (INEKON), the Czech Republic is the biggest foreign investor in Georgia.In Bulgaria, EnergoPro is not the only significant Czech presence here. The Czech energy giant &#268;EZ, which also operates plants and distribution networks in Romania and Albania, owns most of the country non-nuclear power generation units and operates the second biggest power distribution networks, covering the west of the country, including the capital Sofia. The Bulgarian government plans to sell off its minority 33% stake in November. EnergoPro covers the northeast, including Bulgaria’s second city Varna, while the third investor, Austrian EVN, covers the sparsely populated and mountainous South East of the country. Thus, most of Bulgaria’s electricity is now distributed by two Czech companies.Czech companies are present in other sectors of the Bulgarian economy. Probably the most significant of these investments is Hemus. One of the largest office-supply makers in southeast Europe is owned by the south Bohemian Koh-i-noor Holding, which controls Koh-i-noor, the pencil maker, the liquid gas distributor Kralupol (previously Vitogaz) and the mechanical engineering firm Ponas. Under Koh-i-noor, Hemus will soon branch out into electronic measuring devices.Exporter of capitalDuring most of their economic transition, the V4 countries have been importers of capital. This is changing. Hungarian outward investment is traditionally led by their multinationals with an international shareholder base, such as the oil company MOL or the bank OTP. This is similar in the case of Poland where the state-controlled energy company PKN Orlen leads the volume of Polish foreign direct investment. And in the case of Slovakia, few companies have ventured to make significant investments abroad. The biggest investors are two private equity firms, J&T and Penta. These, however, are mostly active in the near abroad, in the Czech Republic and Poland.In contrast, Czechs have been casting their nets far and wide. In terms of economic strategy, this makes perfect sense. Diversification is healthy. A large part of Russian capital stock is at the end of its lifecycle and a strong drive to help replace it via engineering exports is logical. Similarly, Bulgaria is a good focus point for the region (Romania and the EU hopeful Balkan countries) which, being relatively poor, has the potential for fast growth driven by the convergence effect. Pakistan is perhaps more of a gamble, but with well-structured contracts ultimately guaranteed by the Pakistani government (or, in the case of Wikow, the government of the Sindh province), risks can be controlled.The new trade and investment drive is not without controversy. As the flak that Ne&#269;as drew with his comments shows, not everybody is happy with the notion that the Czechs should tone down their traditionally activist stance on a range of political issues.The situation is all the more delicate since part of this success story is the traditionally strong support Czech businesses have in their diplomatic service. Political infighting led by cabinet-level officials might not entirely scupper trade and investment deals, but could create disruptions when transmission channels between the diplomatic service and the financing agencies don’t work properly, for example.Nevertheless, for the moment it looks like the Czech Republic has found a workable strategy to cover at least some of its risks as a neighbour of the ailing eurozone.

September 25, 2012 Santex Pakistan Limited (SPL) are to build a 1.2Mt/y billet plant at Bin Qasim close to Pakistan Steel Mills. SPL is a subsidiary of Santex Group based in Czech Republic.

Muhammad Ashraf, Director SPL, informed Sindh Provincial Finance Minister Murad Ali Shah, and Muhammad Zubair Motiwala, Chairman, Sindh Board of Investment, that a cooperation agreement has been concluded and project financing has been secured on 10 September 2012. The announcement was made during the recent Brno International Trade Fair in Czech Republic.SPL has also paid the full amount of equity for the project and is planning to formally close the financial arrangements in October at a ceremony in Prague.The EAF steelplant will generate its own electricity using a coal based 300MW plant which will have excess capacity of more than 150MW to be made available to the national grid.Commissioning is expected by June 2015.

&#268;TK |12 September 2012Brno, Sept 11 (CTK) - Vitkovice Machinery Group will build a Kc6.1bn (EUR250m) steelworks in Pakistan under a cooperation agreement signed with the investor, Santex Pakistan Limited, at the International Engineering Fair in Brno, Vitkovice CEO Michal Pastusek told CTK Tuesday.Financing of the project through the Czech Export Bank (CEB) is currently being discussed and the contract should be finalised by the end of the year, Pastusek said.It is one of the biggest deals in ten years, he said.Vitkovice will be a general contractor, with Czech firms supplying 70 percent of the project. "It is a condition of the Czech Export Bank," said Pastusek.Pakistani firms will probably be responsible for the construction part of the deal, according to him.Pakistan imports around 80 percent of steel. The new facility will produce around 1.2 million tonnes of steel a year, Pastusek said, adding that the project should be implemented in around four years.The Czech Export Guarantee and Insurance Corporation (EGAP) will provide insurance cover.Vitkovice will deliver a bank of tubes to Russia's Balakovo nuclear power plant for Kc55m, a seventh contract since the signing of memorandum of cooperation with the Russian group Rosatom in Oct 2011, Vitkovice reps told journalists at the Brno fair, held on Sept 10-14.Two weeks ago Vitkovice signed a contract for the supply of EUR7m (Kc172m) equipment for a new unit of the Rostov nuclear power plant.Copyright 2011 by the Czech News Agency (&#268;TK). All rights reserved.Copying, dissemination or other publication of this article or parts thereof without the prior written consent of &#268;TK is expressly forbidden. The Prague Daily Monitor and Monitor CE are not responsible for its content.http://praguemonitor...akistan-czk-6bn

LAHORE: Pakistan’s largest steel producing mill in private sector Tuwairqi Steel Mills Limited (TSML) is ready for commercial production in the first week of January 2013.

It would cater not only the steel needs of the country but would be able to export value-added products to other countries.

The setting up of such a mega project would entice foreign investors in the country despite the fact that local investors are also shifting their entities abroad because of bad law and order situation and energy crisis.

TSML mega project over $350 million is mainly sponsored by Saudi Arabian-based Al-Tuwairqi Company (ISPC) and Posco of South Korea.

TSML Director Project Zaigham Adil Rizvi at a seminar on Monday said this state-of-the-art Direct Reduction route of Iron (DRI) making plant would be starting commercial production but financial crunch put the project so late.

Posco-South Korean steel giant have invested $16 million to make this mega project keep going.

A revolution of industrial growth is in the offing as TSML is ready for commercial production in coming January. It is Pakistan’s first private sector integrated environment-friendly steel manufacturing project.

TSML will serve as a catalyst for the industrial growth in the country as steel has basic and vital role in the economic development of any country.

He said DRI technology is the latest in the world and is being used in not only developed countries but also in our region like Iran and India, so consistent highly quality of product can be achieved through this state-of-the-art technology, he said adding that this technology is environment-friendly.

Rizvi divulged TSML’s DRI plant after commercial production, would not only meet country’s steel requirements but would also create job opportunities for technical and skilled labour force for local people.

He said his team along with Posco delegates has started searching raw material in Balochistan and hoped they would not spend huge foreign reserves in importing raw material rather they would use the local material.

He claimed country’s workforce, especially the youth was not only dedicated and committed but also hard work, so the future of Pakistan was very bright.

Pakistan’s largest steel capacity of 1.28 million tonnes per annum plant would not only cater country’s requirements but also provide job opportunities to skilled and unskilled people.

Other countries including Korea wanted to purchase total production of TSML but TSML management has decided in principal that we would prefer to distribute all our products within the country and in this regard we have selected Lahore-based Shajarpak Company, as our sole distributor.

Khawaja Usman of Shajarpak said currently Pakistan was depending on imports for the production of heavy mechanical structures and engineering goods but after producing high-quality steel at TSML plant, Pakistan would be able to manufacture such heavy equipment locally.

India is giving more importance to its industrial sector while concerned authorities in Pakistan are least bother in this regard.

He hoped raw material from Balochistan would help steel industry to sell its products on low price.

Pakistan Engineering Development Board Chief Executive Ubaid-ullah Qazi said DRI in steel industry would be commenced from first week of January. He said joint venture of Shajarpak Pakistan and TSM of Saudi Arabia in the domain of marketing, distribution and business development of DRI would have deep impact in developing steel and construction industry of the country.

By Mansoor Ahmad LAHORE: While the auto sector is on the same page regarding the import of used cars, the domestic auto parts makers have reservations about the stance of car makers linking the localisation of high-tech engine parts to higher volumes.Chairman Pakistan Association of Auto Parts and Accessories Manufacturers (PAAPAM) Munir K Bana sides with original equipment manufacturers (OEMs). He said that reasonable volumes are essential to go for high-tech parts. He added that he is a regular supplier of radiators to all the car producers of the country. “Recently, one of the OEMs has stopped procuring radiators from Pakistani vendors as it has shifted to high-tech plastic-cum aluminum radiators,” he said.Chairman PAAPAM said that he was producing radiators in collaboration with a foreign supplier and he offered him to join him in manufacturing high-tech radiators. He said that the foreign supplier declined the offer as it pointed out that the volumes in Pakistan are too low to establish a high- tech radiator plant. On evaluating the cost of the plant, he found that producing high- tech radiators would not be viable till the volumes cross half million car units a year.Former executive committee member of PAAPAM Syed Mansoor Abbas did not agree with stance of the current chairman. “There are radiator manufacturers in Pakistan who have not only adopted the plastic-cum aluminum radiator technology but are aggressively exporting these radiators to the US, European Union and other developed countries,” he said. “The actual hitch in acquiring foreign technology is the insistence of the Japanese car manufacturers to go for joint venture or technical collaboration with the company specified by them.”He added since the company providing high- tech technology enjoys monopoly its conditions for a joint venture are linked to volumes and if the auto part makers choose technology transfer, the royalty charged is so high that establishing a high-tech plant requires high volumes.Abbas said that the OEMs should delink the manufacturing of high-tech parts through their designated company. Instead, he added, auto parts manufacturers should be supplied specifications and technical details of the part allowing the manufacturer to acquire technology from any other Japanese company.He said that the Indian car manufacturers have managed to upgrade their technologies on the same conditions but the cost of their parts is high. “This is the reason that the prices of Indian cars are generally higher than similar models produced in Pakistan,” he said.Former chairman PAAPAM Tariq Nazir said that the absence of will on the part of car manufacturers is the reason for non-deletion of high-tech auto parts. He cited the example of tractor producers who showed determination to produce tractor engines. He added that when tractor production in Pakistan was merely 33,000 units, the manufacturers had localised 85 percent of the parts through local vendors.At 60,000 units a year, the deletion level reached 95 percent. “Today the prices of Pakistani tractors are lowest in the world,” he said, adding that high-tech engine parts technology was acquired from the most competitive sources in the world. As far as car manufacturers are concerned, deletion of high-tech is a taboo, he added. He said that all cosmetic parts, such as car body, tyres, batteries, plastic parts, etc., are manufactured locally.